Rajan: Cyber security in banks must be improved

Mumbai: RBI Governor Raghuram Rajan hoped that banks will not be irrationally exuberant in lending at a time when the country will have enormous project financing needs in the coming days. The Governor said to fill out the ranks of middle management that have thinned out by retirements, public sector banks should look for talent with expertise in project evaluation, risk management, and IT, including cyber security.

Speaking at the FICCI-IBA banking summit, Rajan observed that first the focus of banks should move more towards improving the operational efficiency of stressed assets, and creating the right capital structure so that all stakeholders could benefit. To lower the risks in lending further, Rajan recommended bringing in more in-house expertise for project evaluation, including understanding demand projections for the project’s output, likely competition, and the expertise and reliability of the promoter.

He said “It only required a stronger marriage between information technology and financial engineering with an important role for practical industry knowledge and incentive design.”